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PIERS MORGAN, HOST: Tonight, chaos in Libya. Is strongman Moammar Gadhafi's regime about to come to a crashing end? His son remains defiant.

(BEGIN VIDEO CLIP)

SAIF GADHAFI, MOAMMAR GADHAFI'S SON (Through Translator): We will never give up Libya. We'll fight for the last inch to the last shot.

(END OF VIDEO CLIP)

MORGAN: Hundreds reported dead as unrest spreads.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think it's high time for the world to step in and tell this man to stop killing.

(END OF VIDEO CLIP)

MORGAN: What comes next? Brutal crackdown?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We are expecting real genocide in Tripoli.

(END OF VIDEO CLIP)

MORGAN: Or revolution?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The Libyan people have broken the fear. We will not back down.

(END OF VIDEO CLIP)

MORGAN: Why this could be even more significant for the U.S. and for you from what happened in Egypt.

This is the special live edition of PIERS MORGAN TONIGHT.

Good evening. We start with breaking news tonight from New Zealand where the city of Christchurch has been hit with a 6.3 magnitude earthquake with multiple fatalities. We'll have more on that in a moment.

But first the latest from Libya. It's very difficult to be honest to be sure what's happening there tonight. Mobile phones network and the Internets have either been shut down or slowed down. But here's what we do know. Today Libya's government unleashed war planes and helicopter gun ships on its own people.

Meanwhile Moammar Gadhafi appeared on Libya's state TV in a little while ago, denying rumors that he'd fled to Venezuela.

(BEGIN VIDEO CLIP)

MOAMMAR GADHAFI, LIBYAN LEADER: I'm not in France or in Venezuela. I'm still here -- all these dogs. I'm still here.

(END OF VIDEO CLIP)

MORGAN: A brief but extraordinary statement. And I want to begin immediately with Ben Wedeman tonight. He's in eastern Libya. Ben is the first western television reporter to enter and report from inside Libya during this crisis.

Ben, what's going on? What can you see? What do you know?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, what I can see, Piers, is that the eastern part of the country seems to be under the control of anti-Gadhafi forces. As we were driving in from the Egyptian border, we did not see any soldiers, any army, anybody representing the government.

In fact, at the border, there were no formalities whatsoever. And we did see sort of large groups of young men with shotguns, with AK-47s. They seem to be the power in this part of the country. And what they're out there to try to maintain order, but apparently they're also concerned that the Libyan government will strike back, will possibly, they're worried, drop paratroopers into this area, may launch more air strikes on to the eastern part of the country.

So there's a good deal of -- there's a sort of giddy excitement that they finally been able to kick Gadhafi's forces out of this part of the country. But there's a profound concern that they don't have firm control of the situation on the ground yet -- Piers.

MORGAN: I mean, Ben, we've been following you, obviously, around the Middle East as this crisis has developed from Tunisia to Egypt to now into Libya. The key difference it seems to me here is that you are looking at a regime that has made it very clear publicly they are going to get as bloody as it takes to maintain their power. And we could see a completely different situation to the one we saw in Egypt, couldn't we?

WEDEMAN: Absolutely. And this is what Libyans will tell you. They'll point to the case of Egyptian President Hosni Mubarak who did at a certain point crackdown bloodily on his opponents. But after 18 days of largely peaceful protests, he was willing to step down. Nobody in Libya is under any impressions or illusions that Moammar Gadhafi is going to go like that. The worry is that he is going to use everything at his disposal. His air force, the few remaining forces that are loyal to him. Mercenaries to crack down, to try to reestablish control of this country.

The worry is that this is sort the Arab (INAUDIBLE), and this is Romania all over again, just in the Middle East. That this is a regime that's going to go down fighting until to the bloody end -- Piers.

MORGAN: Ben, I mean you're one of the only journalists in there right now. What do we actually know about what has been going on against the people? We're hearing lots of rumors and speculations. Reports coming out from various places suggesting that fighter jets have been firing on the people at the behest of Gadhafi.

Do you have any evidence of that? Did you know if this is true?

WEDEMAN: What we're hearing from people here is that, indeed, that was the case in Tripoli. And there have been occasional air strikes on the eastern part of the country. But just as the world is suffering from this news blackout out from Libya, within Libya itself, they have the same problem.

Many of the satellite news channels are blocked. For instance, the Jazeera Arabic signal is being jammed here. The official media is absolutely worthless in terms of conveying anything that approximates the truth. So a lot of it is by word of mouth.

The local cell phone system, just making a call from Libya -- one part of Libya to the other does seem to be functioning intermittently. So that's how some of this information is circulating. But until you actually see it with your own eyes, it's really hard to say what is going on.

MORGAN: Ben Wedeman, you've done an extraordinary job to get inside Libya. And please stay safe and continue to report for CNN as these developments continue.

Joining me now on the phone is Adam, a Libyan American English teacher who's in Tripoli tonight. For his safety, we're not using his last name.

Adam, tell me what is happening right now in Libya where you are.

ADAM, LIBYAN AMERICAN ENGLISH TEACHER: Well, currently, or the past couple of days?

MORGAN: Well, currently first, and then maybe give me an overview of what you believe is the bigger picture here.

ADAM: OK. Well, today was a day almost like any other day except due to last night's protests, there were a couple of pieces of debris, things in the road blocking mercenaries from getting through into neighborhoods. Army was brought in. We're not sure what the time, they were flown in via helicopter. They set up armed with (INAUDIBLE) with all kinds of semiautomatic and automatic weapons including RPG. They dispersed protesters in the Green Square anti-regime using force.

Let's see, they have been using aerial tactics along with men on the ground to disperse and shoot indiscriminately into crowds along with mercenaries which we're told will be brought out at night kind of in an indirect way which do drive-by shootings. Once again, indiscriminately.

But the Libyan people have taken upon themselves to barricade themselves in their homes and have gone out into the streets and put makeshift barricade checkpoints, making sure that people can't get through, just fly through and spray the area with bullets.

MORGAN: I mean how many people do you think are getting killed here, Adam?

ADAM: It's tough to say, honestly, because you hear a lot of numbers. But we get phone calls in -- from friends and from people we know saying, you know, even driving through neighborhoods, we'll see people setting up, that the Libyan people have a traditional way to set up a -- kind of a funeral procession the day after someone dies.

And you'll see them scattered around town. So I mean, I could easily say it's in the tens -- around maybe 200 from, you know, estimates that I can gather.

MORGAN: Adam, it's quite obvious from Colonel Gadhafi's statement tonight that he's planning on going nowhere. His son has promised bloodshed right until the bitter end if necessary. What's been the reaction from the Libyan people? Do they have the persistence, do you think, to go through with this?

ADAM: I truly believe they do, Piers. The Libyan people are really united. Despite what Saif made to believe. We are all united against having him and his family in here ruling us as they have been for the past 42 years. You know? He has been hoarding wealth, distributing to the very, very select few who is -- close to him.

And everyone else seems to be bearing the brunt of poverty as well as, you know, lack of education and health care. I mean, these are things that have gone on for centuries. Sorry, not centuries, decades. And it's reached a critical breaking point to where enough is enough, you know? Especially with the power that we've drawn from the Tunisians and the Egyptians and being inspired.

Along with the oppression, it's just bottled up to this point where we know we can do it. I mean Benghazi is free, as far as we know, along with the rest of the east side. And we have such hope here. Tripoli's never come out in numbers like this before. They are serious about getting him to leave.

And the brutality he's showing is just making them dig in their heels even harder. They are not ready to move. Until he does. MORGAN: I see extraordinary scenes, Adam. Please stay in touch over this week, I'm sure we'll want to speak to you again. And I appreciate you taking the time tonight to do this.

ADAM: It was my pleasure, Mr. Morgan.

MORGAN: Has the White House been caught off-guard by the chaos in Libya? Here to talk about the political picture in this country is my colleague Wolf Blitzer.

Wolf, this is pretty dramatic stuff, isn't it? I mean Egypt is one thing, but that was relatively peaceful. What we're about to see in Libya, I suspect, could be a lot blood thirsty.

WOLF BLITZER, CNN'S SITUATION ROOM: Yes, we can see a bloodbath because at least in Tunisia then in Egypt we saw the military there, which is all powerful, they decided they didn't want to kill fellow Tunisians or fellow Egyptians.

In Libya's case, I suspect that if given the order, and they probably already have, there won't be that reluctance to kill fellow Libyans. And there could be not just hundreds but thousands of dead people. And the most frustrating thing is what will the world do about that if there is a blood bath in Libya?

Can the United States, the Europeans, the international community, the U.N. -- are they just going to let this happen or is there some sort of international effort that can stop that kind of killing?

And we don't know what's going to happen. But it's such a frustrating moment. And I'm sure the president of the United States is as frustrated as anyone.

MORGAN: Well, I've got to ask you. I mean if you're President Obama and you're watching these scenes roll out like the sort of -- like the predicted domino effect, part of you must be excited that freedom and democracy is breaking out in this way. Another part of you must be terrified about the possible implications.

BLITZER: Terrified because you don't want thousands and thousands of people who are just peacefully protesting, just want a change the government, 42 years of Gadhafi is enough for these people. And if these people are going to just be brutally killed whether by war planes or helicopters, gunfire, then you know it's just going to be an awful situation.

And it's going to underscore -- I mean the changes are dramatic throughout North Africa and the Middle East right now. And I suspect this is only just the beginning. The next six months or a year is going to see even greater change. But it's not going to necessarily be as peaceful as it was in Tunisia and in Egypt.

MORGAN: If you're an American watching this, what should you be thinking? BLITZER: Well, you should be thinking, first of all, about the young people who are going to die. And that's just -- that's awful enough because a lot of innocent people, young men and women, are going to die. And some not so young. Just people who want to see that change.

But you should also be thinking, look, Libya is a huge oil exporting country and the price of oil is going to go up if that's shut down, if there's instability in that part of the world. You know, there are a lot of strategic military, humanitarian aspects of this conflict. And all of us have to watch it and wonder what's going to happen.

MORGAN: So you're at the White House, and some say you should be, Wolf. But if you're at the White House and you're making the call here, if this all kicks off in the way some fear it may and we're seeing widespread attacks on the people of Libya, should America intervene?

BLITZER: I don't think America should intervene by itself, but it wouldn't be out of the question to see an international coalition get together and do something to try to stop the bloodshed.

I remember in the '90s when I was the White House correspondent for CNN in 1998 when Bill Clinton went to Rwanda and Burundi and he acknowledged, he said, -- look, I had received the reports about the slaughter -- of the genocide that was going on in Rwanda.

I was in the oval office, I didn't do anything. And it's the biggest regret that I had. And he told that to the people of Rwanda and Burundi when he was there, and it was an emotional moment.

I suspect that President Obama does not want to have that kind of moment. If he knows that there are thousands of people who are on the verge of dying, I don't think he wants to be -- he doesn't want that to happen on his watch. But I don't know what the U.S. has limited capabilities, obviously. But the Europeans are a lot closer. You know, you're from there. What are the Europeans going to do?

MORGAN: I think it's a fascinating dilemma for all European governments right now. Because it's spreading fast. It's on our doorstep. Big calls for these politicians right now, isn't it?

BLITZER: There's enormous ramifications for the people of Europe, southern Europe, Italy, especially, but all of those countries are going to watch this. And I suspect they're going to be very, very angry.

MORGAN: Wolf, thank you very much.

BLITZER: Thank you, Piers.

MORGAN: "New York times" columnist Nick Kristof is covering the unrest in Bahrain tonight. He joins me by phone from the capital Manama. Nick, what is going on in the Middle East? What's your overview here? What we're seeing is the domino effect that people predicted. But where will this go next? Where will it end?

NICHOLAS KRISTOF, NEW YORK TIMES COLUMNIST: Well, I mean, you know, if I knew, boy, I'd be in that next spot. I don't know. But what is striking is the way it is now sending not only through the Middle East itself, but we're beginning to see it as far away as Zimbabwe today, or in Venezuela, or Gabon, Mauritania, Albania and even in China, although the demonstrations there were -- they seemed to attract as many security people and journalists as they did authentic demonstrators.

MORGAN: I mean you've covered this region for a long time. These are fairly unprecedented scenes. And it seems to me that the news agenda will be dictated by the ferocity of the response from the individual regimes and in Libya, for example, if we can believe these reports coming out this afternoon, you're seeing suggestion that these Libyan fighter planes have been ordered to bomb their own people. That's a major escalation, isn't it?

KRISTOF: Oh, it's huge. But there is something that is important here. I mean at the end of the day, you've had these brutal governments kill their own people for years and years and years. One of the things that first made me interested in this area was, as a backpacker, I went -- a student, I went through Hama in Syria in 1982 right after the president had used everything in his disposal to kill about 30,000 people there.

But what is different now is not only the social media that creates an accountability and let the word get out, but also the way this does spread and just ripple beyond. And I think that that truly is a difference. You're also beginning to see peer pressure from Arab governments not bolstering each other's authoritarian regimes, but actually striking back at them.

I mean what really moved me today that both Tunisia and Egypt set up field hospitals at the Libyan border to help Libyans who managed to get out.

MORGAN: I saw the Yemeni president describing the situation as like an influenza flying throughout the Middle East. And he's got a point, hasn't he? I mean this is very contagious what's happening.

KRISTOF: It's fascinating. But, I mean, you know, instability like this, aspirations have always been contagious. After all, the American Revolution helped lead to the French Revolution. 1848, you had this just freeing of the Serf, you know, spread all across Europe. And in 1989 rippled from China through Europe.

And I think that now we're seeing the same thing. And it's not only in the Arab world, although it's most manifest there, but also in a lot of other parts of the world, as well.

MORGAN: And tell me, Nick, finally, if you're an American watching this program tonight and you're anxious about what you're seeing and hearing, how worried should Americans be? Is this not essentially just a march for democracy and freedom? Shouldn't we be encouraging and supporting what we're witnessing here?

KRISTOF: We should. But, you know, sure, there are reasons to be anxious. Things can go wrong. If you think about the 1989 revolutions in Eastern Europe, Romania was a mess for several years, so was Albania. But at the end of the day, we just can't side with these authoritarian regimes. Static is not the same as stable.

And I think it's especially incumbent upon us to side with people power over the kinds of regimes that we've been in bed with all these years. We need to be on the side of the people who are getting shot, not those who are doing the shooting.

MORGAN: Nick Kristof, thank you very much indeed.

KRISTOF: It's my pleasure.

MORGAN: When we come back, more on the huge earthquake that's rocked New Zealand today. And a deeper look at Moammar Gadhafi, the iron-fisted dictator who has ruled Libya for decades and the secrets of the regime that he built.

(COMMERCIAL BREAK)

MORGAN: More now to my breaking news out of New Zealand.

Police say there have been multiple fatalities after a 6.3 magnitude earthquake struck the city of Christchurch earlier today. Deaths have been reported at several locations and two buses were crushed by collapsing buildings.

Joining me now on the phone is Kim Savage, a reporter with Newstalk ZB.

Kim Savage, what has happened today? How bad has this earthquake been?

KIM SAVAGE, NEWSTALK ZB: Yes, we're starting to get reports out of the city of Christchurch, which is in the south islands of New Zealand. What we do know is that there was an earthquake just before 1:00 this afternoon local time here, a 6.3 magnitude quake around five kilometers deep. So a feeling shallow quake and it would seem just not too far away from that main city of Christchurch.

Some people here describing it as worse than the quake that struck the same area, the Canterbury region, in September last year. That was a 7.1 quake. But already, we're seeing television reports and we're getting reports here in our newsroom of some serious damage to the city.

Buildings collapsing, people trapped in buildings, and many injuries. We're also getting reports of multiple fatalities that we can't say at this stage, just a number of people who have died in this quake. What's going on in terms of the city itself, the airport is closed, so no one's able to get in or out of the city. Cell phones down, so as you can imagine, we're struggling to get information about what's actually going on down there. And the -- our government here has activated a civil defense center in Wellington, our capital. So I'm monitoring the situation.

Thus raising the emergency level to a level three which is the biggest level for a regional disaster of this kind. So just to -- just to sort of describe to you the magnitude of this and just how significant that is. That is a very high alert level.

The -- our prime minister, he has -- he is actually on his way to Christchurch. He will be making his way here. I imagine he might find it difficult, but he will be there to see the situation for himself.

MORGAN: Kim Savage, thank you very much. And our thoughts are with all the people in Christchurch. We're seeing some very difficult pictures from that scene. And clearly there's going to be a death toll, we just don't know how big it is at the moment. But we'll come back to that story before the end of the show.

Now back to Libya. Want to talk about Moammar Gadhafi, the man. Who is he? What are the secrets of his regime?

Joining me is Jamie Smith of SCG International Risk, Khalil Matar, author of "Lockerbie and Libya: A Study in International Relations," and Said Idris, a member of Libya's opposition in exile.

Prince Said, let me start with you because you're a member of the former ruling family there. What are you hearing from your sources in Libya?

PRINCE IDRIS AL-SENUSSI, EXILED MEMBER OF LIBYA'S OPPOSITION: Well, what I'm hearing is that Gadhafi is using the air force, using helicopters, bombing Tripoli. The people are without water, without electricity. Of course, as you know, there's no telephones that are functioning. And now he's imploring to use air force against Benghazi.

What we are really asking the world to do is there is a United Nations resolution that dictates that the leader is committing genocide against his own people, then the world must act. And a former dictator of Libya, Moammar Gadhafi is committing genocide against his people, innocent women and children.

MORGAN: Let me turn to you, Jamie Smith, what is Colonel Gadhafi capable of? What we know about the atrocities he's committed in the past, this is a whole new ball game for him. His whole regime is being threatened. How far will he go?

JAMIE SMITH, CEO OF SCG INTERNATIONAL RISK: Well, good evening, Mr. Morgan. He is a very pragmatic man. He's a survivalist, and we've seen over the years where he has responded to the bombing in 1987 when President Reagan attacked. And his personality changed. His tactics shifted.

And in this case, his regime, he is -- he is trying to hold on to power. He's going to go to just about any lengths he can to hold on to power. And there's a difference here between what is going on in Libya versus what is taking place in Egypt and what took place in Tunisia, in that those states were the military.

The military was the state in Egypt and in Tunisia. In Libya here what we're seeing is that the military arguably does not have the capability to oust Mubarak. And what you wind up with then is if Mubarak steps down or if something happens to him, then you wind up with a regime, but there is no alternative.

Because the concept of regime change assumes that there is some coherent choice that is an alternative to the regime in power. You don't have that in Libya. And so that creates a vacuum, and that creates then the opportunity for groups like al Qaeda in the northern Maghreb or the LIFG to step in.

And now you've got an Islamist entity that has stepped into a power vacuum, similar to what happened in Afghanistan and Iraq and in Somalia. And so, you know, it's very important that --

MORGAN: Yes -- yes, I was going to say, Jamie, I mean knowing the man, when I asked how far would he go, I mean, what is the potential end game here. If the people do rise up against Gadhafi, would he turn on them in the way that Saddam Hussein did to his people once? Would he use chemical weapons? I mean how bad would it get?

SMITH: Well, I believe we've heard his son Saif say that we're going to go down to the last bullet. And what we've seen so far -- we've seen bombing raids against military installations in order to prevent the weapons on those installations from falling into the hands of the opposition.

And, you know, the helicopters have reportedly been attacking protesters in selected areas. You know, they're capable and they are going to -- they're going to kill their people. And the difference is because the military here is following Gadhafi's orders. The military in Egypt and in Tunisia, they did not. They wanted him out. So Gadhafi is in charge and he's got the military at his disposal and he's not going to go away.

MORGAN: Let me turn to Khalil Matar.

Mr. Matar, you've met Gadhafi. What kind of man is he in private when you meet him?

KHALIL MATAR, AUTHOR, "LOCKERBIE AND LIBYA": Just like every other politician. Very charming and very likable, somebody who presents himself as knowing everything that's going around. It's a totally different picture, of course, than you see politicians dealing with the situations they are dealing with in public as erratic as they may be.

Jamie hit the nail on the head when he said that there is no military. That there is a vacuum that's going to happen if the regime changes there. There is another element to the whole situation out there that is the tribal element in addition to the Islamist element.

The regime in Libya is built like regimes in Yemen, in Saudi Arabia, in Jordan. That is an alliance of tribes, of bigger tribes against smaller alliances of other tribes. Even if Colonel Gadhafi decided to give up power, which is highly unlikely in my view, that means his tribe is going to fight until the end.

His sons would fight until the end, his tribes would fight until the end. The tribes are likely to fight until the end. That is the threat of civil war. The Islamists taken over the LIFG as part of the al Qaeda and the Maghreb, Arab Maghreb, which is a more organized element than al Qaeda is right now, the mother al Qaeda is right now. Started to establish many emirates in the eastern part of Libya.

I just hate to see this country falling into the civil war or the threat of the Islamists taken over the country and controlling the one million barrel of oil a day and the one million tons of gas or whatever it is out there, and have a terrorist Islamist fundamentalist, oil-rich country controlling it.

AL-SENUSSI: Excuse me.

MORGAN: It is a very (INAUDIBLE) situation.

(CROSSTALK)

AL-SENUSSI: Can I please -- can I come in?

MORGAN: Gentlemen, thank you all very much for your time.

AL-SENUSSI: Can I come in please? Excuse me.

MORGAN: Yes, you may. You may, Prince Idris.

AL-SENUSSI: First of all, there is an incorrection here. The military are not with Gadhafi. Gadhafi, he has only the mercenaries with him. And there is no Islamic republics. This is incorrect. There will be no vacuum. Libya has went through this in the past. And the people of Libya have stepped up, and they have said Congress where they have a constitution, they have gathered around the forces of the Senussi, and that is not correct. There will never be a vacuum in Libya.

And Gadhafi is going to go. He is not -- Libya will not be under any Islamic republic. It will be a democratic regime. Libyan people will not allow anymore somebody to rule them by rule of thumb. They are going to have a choice. And there will be a democratic Libya, a free Libya, where the Libyan people will control their government, decide what kind of government they want. And there will be no vacuum and no Islamic republics.

(CROSS TALK)

MORGAN: I'm going to have to leave it there, Prince Said, thank you very much. And to the other two gentlemen, thank you very much.

To many Americans, the most unforgivable thing about Muammar Gadhafi is his responsibility for the bombing of Pan Am Flight 103 over Lockerbie in Scotland. Coming up, I'll ask two people who lost loved ones in that bombing how they feel about the turmoil tonight in Libya.

(COMMERCIAL BREAK)

MORGAN: Many Americans' feelings about Muammar Gadhafi can be summed up in one word, Lockerbie. They'll never forget that Gadhafi's regime took responsibility for the terror attack that blew Pan Am Flight 103 out of the sky. Victoria Cummock and Paul Hudson are both from the organization Families of Pan Am 103. Victoria lost her husband in the bombing. And Paul lost his daughter. And they join me now.

Victoria, what is your reaction to what we're seeing coming out of Libya and the potential beginning of the end of Gadhafi's regime?

VICTORIA CUMMOCK, FAMILY OF PAN AM 103: Well, I applaud the Libyan people for uprising and trying to get rid of this very oppressive, brutal leader. It's time that his regime ends and that they can live in a country where human rights are -- and also democracy are being upheld.

MORGAN: And Paul, what is your reaction?

PAUL HUDSON, FAMILY OF PAN AM 103: Well, Colonel Gadhafi has killed in addition to 270 on Pan Am 103, which is second only to Osama bin Laden in terms of terrorist attacks -- he's killed thousands of others. And now apparently he's setting up to kill thousands of his own people.

It's time for him to go. And I think it's time for President Obama to declare that we are with the Libyan people. We do not stand with this regime. And if he does not stop the violence, there will be serious consequences.

MORGAN: Victoria Cummock, Abdul Basset al Megrahi was the man who was convicted of the bombing. He was released by the Scottish government due to his terminal cancer, returned home to Libya in August 2009 and remains alive. What is your view of that decision?

CUMMOCK: Well, he allegedly had terminal prostate cancer. But 19 months later, we know that he's alive and well. I think that we had a basic trading of -- of justice for oil in that situation. I think that both the U.S. government and the U.K. government decided not to pursue justice and hold Megrahi accountable because of all the oil deals that were on the table at the time.

MORGAN: Paul Hudson, do you think you will ever, as a collection of families who went through this appalling ordeal -- I actually knew somebody who died in the Lockerbie crash. And so I know a little bit about the awful pain you must have been going through. Do you think you'll ever get any kind of peace or justice? HUDSON: I think now there's a very excellent opportunity for the full truth to come out. Megrahi was a key to unraveling the conspiracy. I think if the Gadhafi regime falls, many chips will fall. And we will find out not only the full details of that, but perhaps the involvement of Syria and Iran in this incident.

MORGAN: What do you think -- if you had the chance to talk to Gadhafi now, what could he do or say that would make the situation any better for you as -- as a group of families who'd been through this appalling ordeal? Victoria, is there anything he could do now?

CUMMOCK: Well, justice has been denied to all of us. And we know that Megrahi didn't act alone, that he was acting under the orders of this brutal dictator. And he's the one who ordered the terrorist act not only on Pan Am 103, but as Paul mentioned, brutal attacks on hundreds of people.

And, you know, the truth has to come out. And justice cannot come out without accountability. And we have a wonderful opportunity to see all of this unfold right now. We have a better chance of finding out what happened aboard Pan Am 103 and what provoked the bombing of Pan Am 103, and what our government's involvement was in all of this.

We have a better chance now than we have had in 22 years.

HUDSON: I certainly think --

MORGAN: What -- Paul, I was going to ask you, what do you believe prompted the attack on that flight?

HUDSON: Well, we don't know for sure. But the most likely scenario is that it was ordered by Iran in retaliation for the bombing of Libya in 1986 by the U.S., and also by the accidental downing of the Airbus, Iranian Airbus that previous summer.

MORGAN: Victoria, you were the only family member who turned down the compensation that was offered by the Libyans. Why did you do that?

CUMMOCK: Well, it was the terms of the -- the settlement had been offered to the families as a no-fault settlement. And I really felt it was important that if Libya was not responsible for the murder of my husband, then they shouldn't be offering compensation. But if, in fact, they did, that they should admit that they did that and apologize and then talk about restitution.

MORGAN: Victoria, Paul, thank you so much for your time.

HUDSON: Thank you.

CUMMOCK: Thank you.

MORGAN: Coming up, Muammar Gadhafi, public enemy number one or a necessary evil?

(COMMERCIAL BREAK)

MORGAN: How worried should the U.S. be about the chaos in Libya? Joining me now is John Hanna, former national security adviser to Vice President Cheney, and Hank Cohen, former assistant secretary of state for African affairs, and former ambassador to Gambia and Senegal.

John Hanna, let me start with you. What do you make of what we're seeing in Libya tonight? With all of your experience, where do you see this going?

JOHN HANNAH, FORMER FMR. NATIONAL SECURITY ADVICER TO VICE PRESIDENT CHENEY: Well, I think the bottom line is that this regime is doomed. And the only question is how it goes, how much bloodshed there will be, how much chaos there will be. And it seems to me that the United States is a day late in really getting aggressively involved in trying to get an international solution to this problem before things get much, much worse.

MORGAN: I mean, the reality of Libya is that we don't really know what's happening there at the moment. There's no access for most journalists. There's no images coming out, really, which are remotely current. This could get very, very nasty very quickly.

Given, as you say, that America may have been slightly slow off the traps with this one, what can they now do? What can the west do collectively to try to get involved here?

HANNAH: I think a first step, it's absolutely crucial that President Obama now come out and state very clearly that the United States is on the side of the Libyan people in this fight, to rally the international community, at least the civilized world to that -- to that call for action. To do so preferably through the mechanism of the United Nations Security Council, and then to back it up with real teeth, that is to threaten this regime with real political and economic isolation, including a possible prosecution of Gadhafi in some kind of international tribunal unless this violence stops immediately and this regime exits.

MORGAN: Ambassador Cohen, let me ask you about what is happening here with Gadhafi. Do you think that he will go? If he doesn't, what should we do about it? And if he does go, where would he end up?

HANK COHEN, FORMER AMBASSADOR TO GAMBIA: I wouldn't take it for granted that the regime is going to crumble. He is absolutely ruthless. But at the time of 9/11, he had a threat from Islamists and totally wiped them out, totally ruthless. And he has tried tribal troops in his army and security forces, especially from south of the country. They don't care about killing people who live in Tripoli. They just -- so he might just get away with it.

And I agree with Mr. Hannah. We shouldn't allow him to get away with it. We should do what we can to stop this. And maybe I would begin not only with the United Nations, but to try to prevent him from retaking Benghazi. It looks to me from reports that the Benghazi people have taken over. We should not let him take it back. MORGAN: Well, I mean, it's all very well, I guess, sitting here in America saying if he doesn't go, we have to try and force him. He is a ruthless dictator. He's already said through his son that they'll do anything to stay in power, however bloody it gets. What can America actually do about this physically?

Could you see a situation, ambassador, where we sent any troops in from America? Could you see President Obama ending up doing that? Because the military, unlike in Egypt, clearly isn't in control.

COHEN: I don't see American troops going in there. I agree with Mr. Hannah. Things should start with the United Nations and there should be a collective approach. And if this uprising is stopped through absolute killing, I think it has to be very tough economic and political sanctions. The sanctions that were put in place from 1986 to -- to the end of the '90s were very, very effective. And Gadhafi really suffered from that.

MORGAN: John Hannah, there is a debate, as with all of these dictators, as to whether they are necessary evils. How would you position Gadhafi?

HANNAH: I would say that there was clearly, for a long time, several decades, Gadhafi was, in fact, something of America's public enemy number one in the Middle East. He was the man who opened his country, his wallet, his arms depots to revolutionaries and terrorists from around the world.

There was some rapprochement. In 2003, after Saddam had been deposed, Gadhafi decided he needed to come in from the cold, so he wouldn't be next on America's list. He gave up his nuclear program, renounced terrorism, cooperated with the United States, at least partially, in fighting al Qaeda. And therefore, he did become at least an important player in assisting American strategic interests.

MORGAN: John Hannah, Ambassador Cohen, thank you both very much indeed.

COHEN: You're welcome.

MORGAN: When we come back, the economic impact of this virus sweeping the Arab world of freedom and democracy.

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MORGAN: What will the chaos in Libya do to oil prices and to the world economy? Mohammed el-Erian is CEO at Pacific Investment Management Company and Tom Kloza is chief oil analyst for the Oil Price Information Service. Mohammed, let me start with you. What are going to be the economic impacts. We've seen oil prices surging in the last few days. Where do you see this developing?

MOHAMMED EL-ERIAN, CEO PIMCO: In the long term, Piers, it's good news for the economy, in the sense it will be a balanced and more stable economy. In the short term, it's bad news. It's bad news because it will push inflation higher. And it will push growth lower. It's what economists call stagflation.

You get that because oil prices are going up. That is a tax on consumer and it's higher production cost. Risk aversion is going up. This geopolitical uncertainties is reducing animal spirits, so people invest less. Let's not forget that over the last few days, what was a relatively peaceful process has become more violent, and therefore more unpredictable.

So ok for the long term. But in the short term, bad news for both inflation and growth.

MORGAN: Tom Kloza, would you agree with that assessment?

TOM KLOZA, OIL PRICE INFORMATION SERVICE: Well, I'd agree with it in the short term. There's no question we're looking at higher prices and we're looking at some things that can really damage the consumer psyche. Since Friday, we've gone up about eight dollars a barrel for the price of oil. We have about 12 to 15 cents a gallon of catching up to do.

We pay about 1.1 billion dollars as a country right now for gasoline each day. We saw what happened when we paid 1.5 or 1.6 billion dollars a day back in 2008, and it wasn't pleasant.

MORGAN: Mohammed, you suggested it could be a good scenario to emerge from this. Of course, the doomsday may be that Libya literally goes up in flames. Gadhafi refuses to surrender, and he turns on his people . We see utter chaos and appalling bloodshed.

If that was to happen, that could have a very negative impact on the American economy, couldn't it?

EL-ERIAN: It could. And that is a risk, Piers, a risk that we should take seriously, not only in terms of the economic impact, but also in terms of the human suffering that would be associated with that scenario. That scenario that you described is one where oil prices go significant higher and, therefore, we found that we are undermining a growth process that's just taking hold in the U.S.

So we all have a stake in a more peaceful resolution of Libya, and something more along the lines of Tunisia and Egypt.

MORGAN: Mohammed, Tom, thank you both very much for your time.

Next, how the Twitter revolution spread from Tunisia to Egypt and now on to Libya.

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MORGAN: The unrest has spread from Tunisia to Egypt and now Libya, fueled in large part by social media. Where it will go next? By guest, Rafat Ali, is a social media guru and founder of PaidContent.org. Rafat, good to see you again. We're seeing it again, aren't we? It's rolling out like dominos as people predicted. How important has the Internet and social networking been in Libya, compared to the other uprisings we've seen?

RAFAT ALI, FOUNDER, PAIDCONTENT.ORG: I think the fact that the country shut down the Internet and telecom within the country shows that it was very important. I think Internet is about five percent penetration in the country, so it's still very small.

What's big there is mobile phones. I think in Africa, it's one of the first countries to achieve 100 percent penetration. It's about 195 at this point, which means that every person in Libya has at least one or two phones. So I think that is one of the more key roles that I think social media, whether through SMS or through actual people calling each other, I think that's the role that's happening there.

It's unclear whether Facebook or Twitter is playing a large role in this case.

MORGAN: Certainly, if anybody has access to any images that have come of Libya, then please Tweet them to me @PiersMorgan. We're keen to keep up with this story as best we can, given all the limitations on journalists.

Rafat, how do you see this developing around other parts of the Middle East? I mean, people say to me, don't exaggerate the impact of social networking. This would have happened anyway. And in previous, you know, eras, we've seen domino effects with revolutions before. It's not necessarily just because the Internet exists?

ALI: Yes. I think the key question to ask is where does social media end and where does mainstream media begin. I think you and your journalists are using social media. The people who are watching TV are using social media to amplify that.

So I think -- as we've talked before, I think the role is more amplification. The role is more trying to get the word out of those countries. And you're seeing what I call transmission of hope from one country to the other, started with Tunisia, Egypt, now Libya, now Yemen.

You're also actually seeing some of this translate to other parts of Africa, whether it's Zimbabwe, whether it's Cameroon, whether it's some other countries that are in there. I think the role that social media is having is transmission of hope across these lines.

MORGAN: And I was in China recently. There was a huge clamp down being attempted by the authorities there on young people using social networking. They're all getting around it very easily, using foreign proxies on their cell phones and so on.

What are you hearing about China, and whether we can see similar uprisings there, fueled by the Internet and social networking?

ALI: I think the key is not the fact that this jasmine -- China's Jasmine Revolution failed. I think the key is the fact that people are -- at least have this hope that stuff can happen there. I think the government there is very, very savvy in terms of censorship. But if it sees that people are trying to use these kind of tools to organize these protests, I think what -- a few things that can happen is the fact that they will try and at least address those aspirations that the people have.

At least that's the good that can come out of it. The bad part is that they can clamp down on it, which is what they did.

MORGAN: Rafat Ali, again, thank you for your time. Good to talk to you again.

ALI: Thanks for having me.

MORGAN: That's all for us tonight on a huge day in Libya, the latest of the Middle Eastern countries to be engaged in what appears to be a revolution. Now my colleague Anderson Cooper with "AC 360."